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Social Capability and Long-Term Economic Growth. By Bon Ho Koo and Dwight H. Perkins. New York: St. Martin's Press, 1995. x + 356 pages. Cloth $69.95.
This edited volume is a product of a 1991 conference of the same title convened in celebration of the twentieth anniversary of the Korea Development Institute (KDI). It contains fourteen essays (plus an introduction) by fifteen eminent economists divided equally between theoretical issues and country studies. The theoretical issues on "social absorption capability" are explored by K. Arrow, M. Abramovitz, J. Stiglitz, C. Dahlman and R. Nelson; and L. Hurwicz and V. Tanzi. The country studies are by M. Aoki (Japan), B. Koo (Korea), S. Gomulka (socialist Europe), D. Perkins (socialist Asia), F. Fajnzylber (Latin America), L. Kim (Korea), D. Lal (21 LDCs), and L. Krause (on social capability and political systems). A consolidated bibliography and a detailed index are also included.
The primary aim of the book is to explore the relationships between sustainable economic growth and absorptive capacity with respect to technology and other economic shocks. Attention has been drawn to this linkage by the slowdown of the growth engine in the developed countries (capitalist and socialist alike), the unprecedented industrial catch-up by much of East Asia, and the equally unprecedented floundering of much of subSaharan Africa and Central America.
The term "social capability" defies easy definition but it generally refers to the responsiveness of institutions (private and public) to the needs of fundamental economic actors, high rates of investment (in physical, human and social capital) in order to facilitate efficient learning from technological leaders, and openness to the international economy.
Given the large number of high-quality papers included in this volume, space limitations permit only cursory comments on many of them. Moses Abramovitz argues that social capability (linked to the outlook and goals of individuals, the system of incentives, and the roles of government) determines success in adapting often incongruent imported technology. Technological upgrading, in turn, leads to further advances in social capability through its positive impact on economic development. He concludes with the insightful point that "One should say, therefore, that a country's potentiality for rapid growth is strong not when it is backward without qualification, but...